SABMiller plc. Consumer Analyst Group of New York conference. Boca Raton, Florida February 18 th, 2010

Transcription

1 SABMiller plc Consumer Analyst Group of New York conference Boca Raton, Florida February 18 th, 2010

2 Global review Graham Mackay CEO 2

3 Forward looking statements This presentation includes forward-looking statements. These statements contain the words anticipate, believe, intend, estimate, expect and words of similar meaning. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding the Company s financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company s products and services) are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company will operate in the future. These forward-looking statements speak only as at the date of this presentation. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. All references to EBIT in this presentation refer to earnings before interest, tax, amortization of intangible assets and exceptional items. All references to organic mean as adjusted to exclude the impact of acquisitions, while all references to constant currency mean as adjusted to exclude the impact of movements in foreign currency exchange rates in the translation of our results. 3

4 SABMiller key facts World s 2 nd largest brewer # 1 or 2 position in > 90% of markets 1 5 year revenue and EBIT CAGR of 15% and 17% A leading Coke bottler Revenue $b, F05-F EBIT $b, F05-F F'05 F'06 F'07 F'08 F'09 0 F'05 F'06 F'07 F'08 F'09 Market equity capitalization $42.4 billion 2 1. Countries in which SABMiller plc has a brewing presence (including Castel) 2. Market cap on February 17,

5 One of the world s leading brewers Key country market shares Russia 5% Czech 48% Poland 44% North America 30% Italy 20% Romania 33% China 20% India 31% Colombia 98% Peru 88% Tanzania 83% Mozambique 97% South Africa 89% 5

6 A balanced spread of global businesses Twelve months to September 30, 2009 Volumes* Revenue EBITA** 17% 21% 10% 7% 22% 13% 2% 30% 10% 17% 17% 18% 18% 21% 22% 21% 14% 19% Latin America Europe North America South Africa Africa Asia * Excludes contract brewing, includes soft drinks and other alcoholic beverages **Before corporate costs and excluding exceptional items and the amortisation of intangible assets (excluding software) 6

7 An unrivalled portfolio of local power brands Strong portfolio of leading local brands Deep local heritage with leading consumer equity Leading market shares Superior profitability Differentiated portfolio of four international brands: Grolsch, Peroni, Pilsner Urquell, MGD Country Brand Rank Poland Tyskie 1 Czech Gambrinus 1 Romania Timisoreana 1 Italy Peroni 1 South Africa Carling Black Label 1 Tanzania Safari 1 Mozambique 2M 1 Botswana St. Louis 1 Colombia Aguila 1 Peru Cristal 1 Ecuador Pilsner 1 China Snow 1 India Haywards

8 Sector-leading top line growth Organic, constant currency revenue growth 12% 10% 8% 6% 4% 2% 0% -2% CAGR Competitor 1 Competitor 2 Competitor 3 SABMiller SABMiller fiscal years, competitors equivalent calendar years 8

9 SABMiller is best positioned against global growth opportunities Projected market volume growth rate, CAGR % share of volume 2008 High growth markets: >5% Medium growth markets: 2-5% Low growth markets: <2% SABMiller Peer #1 Peer #2 Source: Strategic planning tool ; team, McKinsey analysis, post FEMSA Cerveza transaction 9

10 Beer share of alcohol is a major global growth opportunity 100% 90% 14% 21% 80% 70% 60% 50% 36% 4% 30% 68% 41% 9% 47% 11% 40% 30% 20% 10% 50% 45% 2% 30% 50% 43% 0% North America Africa Asia Latin America East Europe Clear Beer Sorghum Beer Wine Spirits Growing preference for beer due to societal development, category attractiveness and availability Source: Canadean February

11 Regional overview 11

12 Latin America: industry transformation delivering growth Good progress towards total transformation of beer category by SABMiller Consumer insights and brand portfolios Sales and operations Continuous gains in our share of alcohol and share of beer Strong profit growth from revenue and cost management Strong growth prospects in Andean region 12

13 Europe: strong brands weathering economic storm Weak current market fundamentals following a decade of strong growth Further beer growth expected post-recession Unique SABMiller focus on building and maintaining leading local power brands Major market share gains SABMiller captures a disproportionate share of key national profit pools Solid pricing and cost efficiencies driving EBITA growth 13

14 USA: a stronger more competitive brewer Broad beer brand portfolio across segments Strengthened position at retail Focus on revenue management: industryleading revenue/barrel growth Successful cost reduction Midway through $500m synergy program Additional $200m cost savings announced Challenging 2009/2010 industry and economic environment, driven by unemployment 14

15 Africa: accelerated long-term growth Strong beer brand portfolios with a longer price ladder Fuller beverage portfolios to leverage scale in operations Diverse geographic footprint supporting growth Expanded capacity is driving profit growth, despite local challenges 15

16 Asia: improving profitability driven by leading Chinese position Unrivalled national footprint in China, differentiated by #1 Snow brand Over double the size of #2 brand Double the market s growth rate Market share growth, scale and acquisition synergies driving EBITA up by a third in H1 F09 Regulatory environment constraining growth in India Successful Australia beer JV with Coca Cola Amatil 16

17 South Africa: investing for future growth Weak economic conditions constraining growth Reducing operational costs Investing in rejuvenated mainstream brand portfolio Building premium portfolio following recent setbacks Intensifying our sales and distribution competitiveness in the marketplace Leveraging our c. 88% market share 17

18 Four strategic priorities Creating an attractive global spread of businesses Developing strong, relevant brand portfolios that win in local markets Constantly raising the profitability of local businesses sustainably Leveraging our skills and global scale 18

19 Strong, relevant brand portfolios that win in local markets 19

20 Strong, relevant brand portfolios that win in the local market: Latin America Upgraded leading brands with provenance Implementing portfolio strategies, precise positionings and 360 o activation Over 80% of premium opportunity is local brands Premium mix over 8%, up from 5% in two years Primary focus on low/middle class consumers Selective outlet reach Packaging innovation COL PER ECU PAN HON SAL LATAM Premium % of portfolio F F

21 Strong, relevant brand portfolios that win in the local market: Europe Romania Strong brand equities key to driving value F08 F10: 660bps share gain and revenue/hl CAGR of 7% Romania: average RSP growth by segment: CAGR 12% 10% 8% 6% 4% 2% 0% Total Market Economy Mainstream Premium Total Market Rest of Market SABMiller 21

22 Strong, relevant brand portfolios that win in the local market: Africa Creating and driving Premium beer from here across Africa Common positionings and marketing scale benefits across countries E.g. Mozambique: Laurentina Preta up >60%, up from 14% to 22% of volume Uganda Angola Zambia Botswana 22

23 Constantly raising the performance of local businesses sustainably 23

24 Constantly raising the profitability of local business sustainably: Latin America LatAm EBITA and EBITA margin* Unit revenue growth of 7%* Broad cost reduction in Colombia Distribution cost improvements Better marketing efficiency Working capital and CapEx reduction (US$'m) 1,400 1,200 1, F06 PF F07 F08 F09 F10 H1 MAT EBITA EBITA margin 24% 22% 20% 18% 16% EBITA growth of 33%* despite lower organic volumes * H1 F10 on an organic constant currency basis 24

25 Constantly raising the profitability of local business sustainably: MillerCoors MillerCoors JV synergy programme on track Significant financial benefit from synergy capture over 12 months to 9/09 $209m in synergies, enhancing EBITA margin by c. 230 bps* EBITA growth of 28%*, EBITA margin up from 9.4% to 11.7%* Remaining $290m synergies are c. 3% of MAT revenue, to enhance EBITA margin MillerCoors synergy realisation timing Additional $200m in cost savings by end 2012, in line with current expectations c. 2% of MAT revenue * MillerCoors MAT 9/2009 versus pro forma MillerCoors MAT 9/

26 Constantly raising the profitability of local business sustainably: South Africa Reallocation of Costs Real Delta Rm MARKET INVESTMENT +364 Fixed Costs Savings Freight Fortify the foundation Strengthen Key Brands RTM Net Investment 26

27 Constantly raising the profitability of local business sustainably: China 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 Snow Brand #2 Brand # Snow brand growth of 19%, CR Snow share of over 20% Expanding into upper mainstream Continued unit revenue growth Significant cost synergies from previous acquisitions Reducing raw material prices Leveraging economies of scale F10 H1 EBITA growth of over 30% Source: Canadean 27 SABMiller plc

28 Leveraging scale 28

29 Leveraging our skills and global scale Rapid Group top-line growth Diversity of businesses Dynamic growth in many markets New operations, e.g. Ukraine, Vietnam, Angola, Australia Increasing beer market sophistication, particularly in emerging markets Consumers, RTM, retailers and key accounts, supply chain Competitive landscape We are developing more aligned systems and capabilities to Leverage regional and global scale Sustain our industry-leading topline growth and competitive position Enhance our supply chain efficiency & effectiveness Further reduce costs across procurement, commercial operations, finance, HR and IT 29 29

30 Capability investments will deliver material benefits Streamlined, simplified business management Reduce demands on local management teams for non-strategic activities Globally integrated procurement and backoffice systems, enabling lower costs and better coordination Common front-office and supply chain management platforms Faster, easier sharing of information, knowledge and best practices Easier assimilation of acquisitions and synergy capture 30 30

31 First stages of capability investments Procurement New procurement company; upfront investment of c. $40m Strategic, scale-advantaged, low-cost country sourcing; optimally timed and sized purchases Globally centralising the majority of current procurement (c. $10 billion) over time Economies of systems, skills, talent attraction 31 31

32 Business capability programme Financial headlines Income statement steady state benefits of approx. US$300m per annum by F 14 Working capital inflow > US$350m Future business benefits 32

33 Africa 33

34 Africa contribution to the Group going forwards Macro fundamentals are favourable; growth is from a low base Entering new beverage categories to complement our leading beer positions Soft drinks including water Other non-alcoholic beverages A range of more affordable alcohol products Seizing on accelerating growth opportunities Brand/package portfolios across broader price spectra and more consumers and occasions Intensified investment and sales presence in-trade Substantial investment in production, distribution and people SABMiller has the leading strategic positioning in Africa, with successful partnerships with Castel and The Coca-Cola Company 34

35 Africa: GDP Real GDP growth a dismal decade the star performer World Asian NICs Sub-Saharan Africa USA Sub Saharan Africa LATAM Euro Area Asian NICs Source: IMF International Finance Statistics 35

36 Africa: GDP GDP growth underpinned by improving macroeconomic fundamentals Africa trade balance Africa debt $bn $bn Source: IMF International Finance Statistics 36

37 DRC Zimbabwe Angola Tunisia Kenya Cote d Ivoire Zambia Uganda Tanzania Mozambique Nigeria Ghana Madagascar Morocco Guinea Senegal Chad Ethiopia Malawi Algeria Egypt Niger Mali Somalia Sudan Litres p/capita Cameroon Substantial growth potential South Africa Namibia Botswana Data Source: (1) Plato Nov07 Population 950m 37

38 Consumer fundamentals are favourable Robust economic fundamentals and prospects Strong population growth Moderate inflation GDP growth F10-F13 Population growth F10-F13 6% Africa 3% Africa 5% 2% 4% 3% World 2% 1% North America LATAM APAC 2% 1% 1% Europe 0% 0% Source: Economist 38

39 Africa growth drivers Full beverage portfolio.not only beer Differentiated beer portfolio.affordability and premium opportunity Winning at the Point of Sale.marketing investments Capacity and capability.new breweries.skills and experience in Africa.cost optimisation SABMiller F03 F09 volume 5.8% CAGR (incl Castel)* 7.4% -1.6% 9.0% Clear Beer Opaque Beer CSDs *Equity accounted volumes 39

40 $US EBITA per annum Full beverage portfolio Enhancing value: scale effects of a fuller beverage portfolio Market scale via production, management and distribution synergies Countries are mostly small, consumers are relatively poor Scale benefits from beer alone are limited Total hls per SABMiller HUB Zambia combined EBITA margins Acquisition of CSDs 4 2 US Latin America Europe South Africa Asia Africa 0 F97 F00 F02 F04 F06 F08 40

41 Full beverage portfolio SABMiller Africa footprint key partnerships Managed operations in 16 countries. Castel operations in 22 countries. SABMiller and Castel are the Coca-Cola bottler in 20 of their 36 countries. Associate investment in EABL (Kenya) / Delta in Zimbabwe. SABMiller managed volumes 17mhls incl associates & Castel 25mhls Castel SABMiller Associates Comores Madagascar Mauritius 33% 16% 50% Clear Beer Opaque CSDs Other 41

42 Differentiated beer portfolio Affordable, mainstream & premium categories 5% CAGR Premium brands Mainstream brands 3% CAGR 25% CAGR Affordable brands Affordable Mainstream Premium F05 F09 42

43 Differentiated beer portfolio Driving revenue management and affordability 48 Indexed consumer price Mozambique s beer price ladder is a robust portfolio model for growth and sustainability in Africa In Mozambique, a 340ml draught serving is < ½ the price of a full size returnable bottle, and the margins remain attractive 2M 340ml Draught Barons Raiz 2M 550ml Lpreta 550ml Lprem Peroni 43

44 Mainstream Strengthening our mainstream brands Driving distinctive positioning and integrated commercial campaigns Packaging renovations Brand renovations 4 year 5% CAGR F05 F06 F07 F08 F09 44

45 Africa premium brands: standardised positionings driving scale & efficiency Packaging & Brew Communication 1. Crystal Malt 2. Maluti/ Sibebe % Malt 4. Preta (dark beer) 45

46 ..Affordable Driving affordability Eagle proposition Trading up homebrew drinkers into an affordable lager beer. Leveraging local ingredients for lower excise and sustainable economic development through local enterprise. Affordability further enhanced through lower transactional values small RGB draught servings 300ml / 500ml. Total affordable brand volume now 1 million hls MAT with CAGR 25% F05 F06 F07 F08 F09 F10 46

47 hl's '000..Affordable Opaque beer Sorghum / maize short shelf life. 25% of the price of beer per ml with strong margins. Opportunities from brand, pack renovation. Supply chain opportunities $5m implemented. 3,000 2,500 2,000 1,500 1, Malawi Zambia Botswana Zimbabwe * Zimbabwe volume FO8 * Traditional beer Clear beer 47

48 New business Maheu expanding off the Trade Kings / Zambia acquisition Best described as a type drinking yoghurt, but maize based and of higher viscosity. DRC Zambia Zimbabwe Mozambique 25% of volumes current exported: DRC Zimbabwe Malawi Mozambique Zambia presents a platform to expand into these and other countries with local production. 48

49 Carbonated soft drinks SABMA CSD footprint SABMA / Castel are leading TCCC bottlers in 20 markets. CSDs make up nearly a quarter of our SABM managed businesses. Value sharing agreement with TCCC allows for alignment of objectives Positive growth prospects. Comores Madagascar Mauritius 49

50 Water SABMA Water footprint F09 F10 Comores Madagascar Mauritius Africa water market has been growing at 17.5% CAGR mhls Africa water market has been growing at 17.5% CAGR F 08F 09F 10F F09 4 Countries 35 khls F10 7 Countries 1.4 mhls 50

51 Winning in channels and with customers Marketing spend to increase in double digits every year Sales force Coolers , , , ,000 - F08 F13 - F08 F13 Depots Outlets direct service 80 60, , , ,000 - F08 F13 - F08 F13 51

52 Winning at point of sale Direct learnings transfer Building retailer loyalty by investing in outlet infrastructure Enhancing retailer loyalty by investing in outlet infrastructure in Lima Enhancing retailer loyalty by investing in outlet infrastructure in Tanzania 52

53 Capacity and capability Building capacity production Capex programme of $370m currently in progress, expected to reduce to $200m from next year Building capacity people Experienced and diverse team bolstered with senior talent development programmes Africa specific leadership programme F10 project include: Angola, North Luanda 2,500 khl Mozambique, Nampula 500 khl Tanzania, Mbeya 500 khl Southern Sudan, Juba 250 khl 53

54 Enterprise development Enterprise development driving localisation of our supply chain Approx 82 % of raw materials in final product imported long supply chains offer opportunity to localise and take out costs. New raw materials such as cassava and sorghum. Aim to have in excess of 45,000 small-holder farmers involved in these initiatives by F12. Input savings and excise opportunities. Creating win-win partnerships in Africa. Number of Participating Farmers will exceed 45,000 in F12 New and existing initiatives Feasibility stage Future opportunities F05 F06 F07 F08 54

55 SABMiller Group: conclusion Beer industry topline growth leader, driven by our unique local commercial and operational capabilities Our local brand portfolios are performing in superior fashion Economic headwinds are continuing with consumer indicators lagging GDP stabilisation SABMiller s medium-term growth prospects remain strong 55